What is Supply Chain Visibility?

Supply chain visibility allows companies to track and access real-time data across every tier of the supply chain, from raw materials at your suppliers’ supplier to delivery of finished goods to your end customer. By enabling this visibility, companies can monitor the movement of goods, track inventory levels, gain real-time access to supplier performance, and monitor production status and customer demand across internal systems and external partners—including suppliers, contract manufacturers, logistics providers, and distributors.
 
Forward-thinking executives have leveled up with artificial intelligence and advanced technologies and are utilizing these predictive insights to fuel SIOP (Sales Inventory Operations Planning) and drive bottom-line results. These advanced technologies will provide predictive status and estimated time of arrival (ETA) in real-time, enabling predictive available to promise (ATP) functionality in your ERP and advanced planning system (APS). In today’s environment of global uncertainty and geopolitical risk, long lead times plagued with supply chain disruptions, and rising customer expectations with the Amazon Effect, visibility is no longer optional—it’s a strategic necessity.

The Value of Supply Chain Visibility

Supply chain visibility has become of paramount importance to ensure customer satisfaction and to profitable growth. Specifically, the key benefits of pursuing enhanced supply chain visibility include the following:

  • Customer service: A dramatic improvement in customer service will occur as reflected in OTIF (on-time in full), OTD (on-time delivery), quick answers to status questions, and improved promise dates.
  • Quick responsiveness: Companies can respond faster to disruptions such as delays, shortages, disruptions, and capacity constraints.
  • Increased cash flow: Inventory levels can be reduced and inventory velocity accelerated at each stage in the end-to-end supply chain as inventory no longer must be held to cushion against variability in demand, lead times and supply disruptions.
  • Improved margins: As disruptions are mitigated and ETAs are predicted, expedite fees and penalties will be reduced. Additionally, as better planning can occur, waste and costs will be reduced and efficiencies will be gained.
  • Forecast accuracy: By better leveraging real-time demand and supply signals, forecast accuracy improves which also fuels customer and operational performance improvements.
  • Align functions: As departments from procurement and production to sales and customer service are better aligned with a single version of the truth (ETAs and SIOP), collaboration and engagement increase, thereby stimulating exponential results.
  • Sustainability: As visibility is gained in the end-to-end supply chain, there are opportunities to minimize emissions and achieve sustainability goals.

Gaining Base Supply Chain Visibility

Every client wants supply chain visibility. It is a hot topic of conversation to at a minimum increase the reliability of the ETAs in their ERP system so that they can improve customer service while being more efficient.

For example, a motorcycle helmet distributor saw supply chain visibility as the 80/20 of their system effectiveness when pursuing an ERP upgrade. Since they purchased products from Vietnam and other Asian countries, their entire planning process was dependent on the end-to-end supply chain from manufacturing facilities in Vietnam to transportation to the ports in Asia to ocean shipping to U.S. ports to trucks to drayage trucks to distribution. As volatility increases at each point in the supply chain, their operations were negatively impacted as the visibility was non-existent or delayed.

In another example, a building products manufacturer was suffering with low service levels and extended lead times with the volatility during the pandemic. Customers increased orders suddenly, and the company struggled to coordinate end-to-end supply chain activities proactively with lagging indicators. Thus, we worked to establish a base level of supply chain visibility in their order fulfilment cycle. We developed business intelligence reporting and a SIOP model platform with predictive insights and analysis on order backlog and inventory availability. The team incorporated the following improvements:

  • Supplier delivery ETAs: updated estimated ETAs from key suppliers.
  • Production schedule ETAs: more timely production schedules, status and estimated completion dates, utilizing MRP (material requirements planning), APS (advanced planning system) and supporting tools.
  • Intrerbranch shipment schedules: the team better forecasted shipment schedules and milk runs to distribution centers, utilizing DRP (distribution requirements planning) and APS.
  • Transportation ETAs: incorporated tracking and timing from transportation partners and their TMS system.
  • Customer promise dates: improved estimated delivery dates and worked with customers to update promise dates if feasible while updating an expected ship date in the ERP system.

We worked to establish a base level of supply chain visibility in their order fulfilment cycle.. When the order fulfillment processes were updated with more frequent and timely updates of ETAs, the workload increased. Of course, the teams didn’t think it was sustainable on a daily or weekly basis, and so we automated what was feasible with already-existing systems.

They utilized SAP (their ERP system), APO (their APS system), and BI (reporting). We expanded upon their business intelligence reporting, worked with the order fulfillment teams to better utilize SAP and APO, developed a tool that automated order backlog and inventory analysis and provided insights, and created a SIOP model platform to support the process. These requirements and functionality needs were the genesis for the LMA SIOP platform. The process became sustainable on a weekly basis and was accompanied with a meeting that looked forward and projected shipments, order issues, and operational bottlenecks. The team successfully moved from the low 40%’s in service to the 90%’s.

The Value of Advanced Supply Chain Visibility

Forward-thinking executives are leaning on advanced supply chain visibility technologies. Although commonsense approaches in combination with typical ERP and related systems will achieve bottom-line results, utilizing artificial intelligence and advanced technologies software such as project 44 software will accelerate and enhance results. Several of the advanced visibility related technologies utilized in supply chain visibility software solutions include:

  • GPS (Global Positioning System): a technology that performs a foundational role in supply chain visibility software, providing real-time location tracking of shipments, vehicles, and assets across the supply chain.
  • Geofencing: a powerful capability within supply chain visibility platforms that uses GPS, RFID, or cellular signals to create virtual boundaries around physical locations—such as ports, warehouses, distribution centers, or customer sites. The system will trigger real-time alerts as goods enter or exit these predefined zones.
  • IoT (Internet of Things) & Telematics: IoT sensors on trucks, containers, production and warehouse equipment, and products capture real-time location, temperature, humidity, emissions, and shock data.
  • Data alerts: The ability to normalize data and provide exceptions, alerts and flags to transform static tracking systems into dynamic, decision-support platforms by notifying teams in real time when specific conditions are met or deviations occur.
  • Integration software: Data from multiple sources must be connected in real-time. The most common include APIs (application programming interface), EDI (electronic data interchange), customer and supplier portals (typically B2B integration gateway), data integration / ETL (extract, transact, load) software, blockchain and middleware options.
  • Artificial intelligence: AI technologies enhance visibility with predictive ETAs, risk scoring, route optimization, exception detection, and much more.
  • Digital twins: Digital twins create a virtual replica of the supply chain to simulate disruptions, test scenarios, and evaluate planning options.
  • Control towers and dashboards: It is as it sounds, providing relevant information at your fingertips so that leaders can proactively plan around risks and evaluate trade-offs.
  • Data lakes: Data lakes are centralized repositories that store large volumes of structured, semi-structured, and unstructured data. A data lake with real-time information enables organizations to consolidate data from multiple sources across the end-to-end supply chain and leverage it for advanced analytics, predictive modeling, and real-time decision support.
  • Cloud computing: Talk with anyone crunching data from several supply chain visibility sources, and they will communicate the critical necessity of cloud computing to enable global access, scalability, and collaboration across all partners.
  • Crowdsourcing: Crowdsourcing supplements traditional data sources by gathering insights from large, decentralized networks of users or devices, creating a richer, more dynamic view of what’s happening across the supply chain. For example, this type of data can be used in transportation real-time tracking and/or disruption tracking along routes.

Don’t wait for perfection to start the journey to supply chain visibility, but stay aware of the latest technologies, capabilities and options to continually enhance your visibility in the way that is most meaningful for your situation.

Fueling Success with Supply Chain Visibility

Companies that pursue supply chain visibility improvements and the most meaningful advanced technologies to support their customers and profitability will thrive in the next decade. The pandemic showed the value of supply chain visibility. When most companies struggled to figure out and navigate their supply chain disruptions, the best ramped up their supply chain visibility business systems.

For example, P&G used its global control tower network to track inventory and shipments in real-time, detect early warning signs of disruption, and coordinate quick responses to COVID disruptions. They used their APS system to gain full visibility across their demand and supply networks to run daily and/or shift planning cycles, reallocate production across sites in real-time based on changing conditions, and monitor and redirect materials and resources as needed. In addition, they leveraged an integration and analytics platform to gather data across systems and eliminate delays, create dynamic risk dashboards, and enable faster scenario modeling. P&G viewed end-to-end visibility and expanded further into their supplier network and logistics partner to identify critical raw materials and alternate sources, assess supplier health, and map potential bottlenecks. Resiliently navigating the pandemic not only enabled profitable growth but it supported consumers and employees.

As massive investments spur growth in manufacturing and the global landscape evolves, supply chain visibility will become a “must”. Proactive and innovative companies will have more opportunities than ever before, at least in recent decades, with the winners creating differentiation and separating from the pack at a rapid pace by deploying strategies such as advanced supply chain visibility. No matter your size and capabilities, start by taking steps forward on your supply chain visibility journey.

© Lisa Anderson 

 

If you are interested in reading more on this topic:
Advanced Planning Strategies to Optimize Manufacturing Success